The Swiss Re Institute has reported that global insured losses from natural catastrophes surged to $108 billion for the fourth consecutive year in 2023, with the earthquake in Turkey and Syria, severe convective storms (SCS) and large-scale urban floods acting as the main drivers.
A news report from the Institute indicated that total global insured losses rose to $117 billion in 2023, with natural catastrophes accounting for $108 billion while the balance derived from man-made catastrophes.
In terms of total economic losses, the firm reported that in 2023 losses stood at $291 billion, of which natural catastrophes made up $280 billion.
According to Swiss Re, being the most destructive natural catastrophe of the year, the earthquake in Turkey and Syria caused insured losses of $6.2 billion even as the year also recorded a high frequency of events, with 142 insured natural catastrophes recorded setting a new record.
Swiss Re clarified that most were of medium severity, resulting in losses of $ 1–5 billion, adding however, that there were at least 30 such events in 2023, many more than the previous ten-year average of 17. Of those 30 events, 21 were SCS, a new high, accounting for $64 billion in insured losses.
The firm also noted that increased exposures due to economic and population growth, urbanisation and wealth accumulation “remain the main force” behind rising SCS-related losses, with climate change effects likely to exacerbate the trend.
The report further clarified: “Another factor is changes in exposure vulnerabilities, such as a rapid growth of solar power system installations on rooftops.
“The first step to cutting losses is to reduce the loss potential through adaptation measures like enforcing building codes, building flood protection barriers, and discouraging settlement in areas prone to natural perils.
“Additionally, a collaboration with primary insurers, insurance associations and the public sector enables a data exchange which is key for shared risk mitigation”, Swiss Re added.
Commenting on the report’s findings, Swiss Re’s Group Chief Economist, Jérôme Jean Haegeli, said: “Even without a historic storm on the scale of Hurricane Ian, which hit Florida the year before, global natural catastrophe losses in 2023 were severe.
“This reconfirms the 30-year loss trend that’s been driven by the accumulation of assets in regions vulnerable to natural catastrophes. In the future, however, we must consider something more: climate-related hazard intensification.
“Fiercer storms and bigger floods fuelled by a warming planet are due to contribute more to losses. This demonstrates how urgent the need for action is, especially when taking into account structurally higher inflation that has caused post-disaster costs to soar”, Haegeli added.
